Abstract

http://ssrn.com/abstract=559626
 
 

References (46)



 
 

Citations (27)



 


 



Are Contributions to Public Pension Programmes a Tax on Employment?


Richard F. Disney


University of Nottingham; Institute for Fiscal Studies (IFS); Axia Economics


Economic Policy, Vol. 19, No. 39, pp. 267-311, July 2004

Abstract:     
Many studies describe the potentially adverse impact on employment of the payroll costs of financing public pension programmes. Conventionally, empirical studies treat contributions to public pension programmes as a pure tax (in, for example, calculations of the tax wedge by OECD). But this approach ignores any future rights to benefits that are perceived by contributors. In fact, public pension programmes contain both an 'actuarial' and a 'redistributive' component - the former closer to saving, the latter a tax. The paper constructs indicators of the tax component of pension programmes, both between and within generations, across a range of OECD countries and time periods. It uses these measures in a cross-country panel analysis of the determinants of age and gender-specific economic activity rates. The results reveal robust evidence that when public pension programme contributions are broken down into a tax component and a savings component, the tax component of the payroll contribution reduces economic activity rates among women while a higher retirement saving component has the opposite effect. There is little evidence that average tax rates, however constructed, have any adverse impact on the economic activity rates of men.

Number of Pages in PDF File: 44

Accepted Paper Series


Date posted: July 11, 2004  

Suggested Citation

Disney, Richard F., Are Contributions to Public Pension Programmes a Tax on Employment?. Economic Policy, Vol. 19, No. 39, pp. 267-311, July 2004. Available at SSRN: http://ssrn.com/abstract=559626

Contact Information

Richard F. Disney (Contact Author)
University of Nottingham ( email )
School of Economics
Nottingham NG7 2RD
United Kingdom
+44 115 951 5620 (Phone)
+44 115 951 4159 (Fax)
Institute for Fiscal Studies (IFS)
7 Ridgmount Street
London, WC1E 7AE
United Kingdom
Axia Economics ( email )
38 Concanon Road
London SW2 5TA
United Kingdom
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